April 15 is a day on the calendar that can come — and go — in 2021 for many taxpayers, but not all.
This tax season, the traditional federal income tax deadline for individual returns shifts from April 15 until May 17. Ditto for most state income tax deadlines (some fall even later).
Of course, the extension for filing a return — granted by the IRS due to the ongoing pandemic — doesn't mean we can all stop worrying about taxes completely.
April 15 remains a key deadline for some freelance and gig workers, small business owners and some people with substantial earnings from interest and dividends, rent and alimony.
Even though federal and state tax returns are due May 17, many people still need to pay their first quarter 2021 estimated tax payments that are still due April 15, said George Smith, a CPA with Andrews Hooper Pavlik in Southfield, Mich.
And frankly, it can be a little tough for small business owners and others to calculate an estimated tax payment for the first quarter of this year if they aren't looking at a completed 2020 tax return.
CPAs and other tax professionals had hoped that the Internal Revenue Service would extend the deadline for those estimated payments to May 17.
IRS Commissioner Charles Rettig has maintained that the tax filing deadline extension is designed to accommodate the needs of the “most vulnerable individuals" and those struggling to gather their tax information.
But he has argued that many wealthy taxpayers don't make estimated payments as they should and then invest the money to their advantage. "And we’re not going to give them a break of interest and penalties to do so,” Retting told a congressional hearing in March.
Advocates for the extension noted that many struggling small businesses would face great difficulty meeting an April 15 deadline. Many pay their quarterly estimated taxes based on their returns from the previous year. So if these businesses do not file until May 17, 2021, they would not know what their estimated payment liability would be as of April 15.